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Conrad Black had no idea about packed boxes, assistant testifies

OSC considers sanctions on former media baron.

Conrad Black during an appearance at an OSC hearing earlier in the week. His longtime assistant, Joan Maida, was the first witness for the defence on Thursday. (Colin McConnell / Toronto Star) | Order this photo

Conrad Black’s personal assistant testified on Thursday that the former newspaper baron had no idea that she packed boxes with his personal items while their Toronto St. office was filled with inspectors from an accounting firm.

Joan Maida, who has worked for Black since 1994, was the first witness for the defence at the hearings before the Ontario Securities Commission.

She recalled the spring of 2005, when the Toronto offices of Hollinger Inc. and Hollinger International were inhabited by inspectors from accounting firm Ernst & Young, who were examining and making copies of documents and computer hard drives.

At the same time, Black, Maida and Hollinger executives were being evicted from the premises.

Maida testified that she talked to Black about setting up an office in her home. On May 20, she packed several boxes with Black’s “personal memorabilia” and said that she was going to take them home.

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“I did this completely of my own accord. He did not know I was packing boxes,” Maida told the OSC panel.

Black was the founder and head of the Hollinger newspaper empire when the companies imploded nearly a decade ago.

Black, former chief financial officer John Boultbee, and other executives were accused of operating a scheme that used so-called non-competition payments to enrich themselves at the expense of Hollinger shareholders.

Black and Boultbee each served time in a U.S. jail on one count of fraud. Black was also convicted of one count of obstruction of justice related to 13 boxes of documents that he removed from his Toronto St. office.

Now, the OSC is considering whether it should ban Black and Boultbee from acting as officers or directors of companies in Ontario that raise money in capital markets or issue shares to the public.

Under cross-examination, Maida couldn’t say how many boxes she packed or what was in the others that were moved that day.

“You’re asking me about something I did nine years ago. I really don’t recall how many boxes I packed that day,” she told OSC counsel Jed Friedman.

At Black’s criminal trial in the U.S. in 2007, Maida testified that she packed four or five boxes, the commission heard.

Maida told the OSC panel on Thursday that she knew the office was full of inspectors from Ernst & Young.

At Black’s criminal trial, Maida testified that she didn’t know about the inspectors. She testified at the time that she saw people looking through company files, but didn’t know who they were or why they were there, and didn’t ask.

In previous testimony, she also said that the personal items in the boxes may have included business emails, contracts and copies of cheques.

The panel also heard from Donald Vale, former president and independent director of Hollinger Inc.

Vale acted as a liaison between Hollinger and the inspectors, he testified. He also believed it was his duty to represent Hollinger shareholders.

Vale told the panel that he had no relationship with Black and was not called as a witness at the U.S. trial.

On May 20, Maida asked Vale about removing several boxes of Black’s personal memorabilia. “She felt there was nothing indecent or inappropriate about moving these things but she wanted my approval,” Vale testified.

Vale said he carefully examined the boxes, which were not sealed. They contained books, photographs, and many items from Black’s time in Britain’s House of Lords.

“It was a very easy decision,” Vale testified. “It was clear these things were personal effects.”

Vale said that he was thorough, but didn’t count the number of boxes he checked.

He gave a green light for the boxes to be removed, but then decided to get a second opinion from the inspectors on site. The approval wasn’t forthcoming, but Maida later told him that “Conrad has taken care of it.”

Vale testified that when he saw Black at the office later that day, “Black was in a rage like I had never seen him before. He was so distressed and upset that he couldn’t get his personal belongings out of the building.”

There is no need for stock market regulators to ban Black from Ontario’s capital markets because the odds of the former newspaper baron doing something wrong are “infinitesimal,” his defence lawyer told the quasi-judiciary panel.

After what Black has gone through in the last decade, “the likelihood of repetition is infinitesimally small — it would have to be measured in picograms — a trillionth of a gram,” Peter Howard said during his opening statement.

The panel should only make an order in the public interest “to ensure that similar conduct does not occur in Ontario in the future,” Howard said, calling his client “a man of principle.”

“He did not knuckle under and make a false confession to save money or his skin. He had no option but to meet the 17 charges and was substantially successful. That’s the issue when you get to remorse,” Howard said. “It has been demonstrated that almost everything that was leveled against him was unfounded. Why should he show remorse for that?”

Maida’s testimony was interrupted several times as lawyers argued over what evidence from the U.S. proceedings could be included in the OSC hearing.

“We understand there is a lot at stake for Mr. Black. There’s a lot at stake for staff in these proceedings,” OSC commissioner Christopher Portner said at one point. “Let’s try and do what we can to avoid this becoming a battle over every single question that is posed.”

Black is expected to testify on Friday on the non-competition payment that was the basis for his fraud conviction in the U.S., as well as the boxes removed from his office.

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